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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Shadow ACT: unrelieved surplus: restriction on set- off of arising as the result of a surrender

No unrelieved surplus ACT consisting of ACT surrendered to the company under ICTA88/S240 (2) can be set against the company’s liability for any accounting period in which, or in any part of which, it was not a subsidiary (as defined in Section 240) of the surrendering company unless throughout that period or part both companies were subsidiaries of a third company.

In determining to what extent the remaining unrelieved surplus ACT derives from an amount or amounts surrendered to the company, unrelieved surplus ACT consisting of surrendered amounts are treated as having been set against the CT liabilities before unrelieved surplus ACT consisting of ACT paid by the company in respect of distributions made.